The Composite Consumer Sentiment Index (CCSI) rose 2.1 points from August to 106.6, its biggest monthly gain since May, the Bank of Korea (BOK) said Wednesday.
The rebound followed a 2.3-point decline in August that ended three consecutive monthly increases. September’s reading returned to its June level, when the stock rally was at its peak.
The BOK attributed the recovery to reduced stock-market volatility, favorable economic conditions and stronger household income expectations. The survey was conducted from Sept. 9 to 16.
A CCSI reading above 100 means consumers are more optimistic than the long-term average, while a reading below 100 indicates greater pessimism.
The household income outlook rose 2 points to 102 and contributed 0.9 point to the headline index, the most among its six components. The BOK cited expectations that stronger economic growth would lift household incomes.
Perceptions of current living conditions showed no improvement, with the index unchanged at 92. The outlook for living conditions rose 1 point to 98, while consumer spending expectations increased 1 point to 110.
Consumers also became less pessimistic about the broader economy.
The index measuring current economic conditions jumped 4 points to 83, the largest increase among the six CCSI components. The BOK cited continued strength in exports and consumption alongside reduced stock-market volatility.
The outlook for future economic conditions edged up 1 point to 90, while the employment outlook gained 2 points to 88.
Interest-rate expectations climbed 3 points to 128, their highest level this year and sharply above January’s reading of 104.
Housing price expectations held at 125 for a second month. The BOK said continued gains in apartment prices in the Seoul metropolitan area were offset by government housing measures and the Aug. 27 base-rate increase.
Inflation expectations also remained steady. Consumers expected prices to rise 2.7 percent over the coming year, unchanged for a third consecutive month. Expectations three and five years ahead both held at 2.6 percent.
Petroleum products were the most frequently cited source of inflationary pressure, selected by 52.7 percent of respondents, up 2.5 percentage points from August.
The survey covered 2,500 urban households nationwide, with 2,226 responding.
AJP Takeaways
- Consumer sentiment posted its biggest monthly gain since May as stronger income expectations outweighed concerns over borrowing costs.
- The household income outlook improved to 102, but perceptions of current living conditions remained unchanged at 92.
- One-year inflation expectations held at 2.7 percent for a third month, while interest-rate expectations reached their highest level this year.
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